20th Century Home Price Changes

California Housing Prices

Many home buyers, investors, and real estate agents have seen significant home price changes over the past several years and decades. To better understand the property values today in 2018, the historical price changes must be reviewed in depth to compare how much the property values have increased between the 20th and 21st centuries. What may shock many readers is how much that home prices have escalated between 1940 and 2018. California, specifically, has far outpaced the rest of the nation due to the demand for prime properties far exceeding the available supply as noted below.

20th Century Price Trends

Median-priced homes quickly rose in value after the end of the The Great Depression (1929 – 1939) and the start of the growth of suburbia in places that later expanded out towards western states like California partly thanks to the expansion of FHA and VA home mortgage loan options that allowed 0% to 3.5% down real-estate-pricepayments, improved car access by way of national highway systems, the ending of World War II (September 1939 – September 1945), and a booming U.S. economy. The economic and housing boom was especially between the later years in the 1940’s up until the year 2000 in spite of several down years related to wars, inflation, and the booming and busting oil market cycles that happened quite often in the 1970’s decade.

Between 1940 and December 31st, 1999, the national median home values that were adjusted for inflation nearly quadrupled over that 60-year time period. In 1940, the median home price for the nation was $30,600. By 2000, national median home values rose to $119,600. U.S. Homeowners in the 1970’s decade experienced the fastest percentage increase of home prices (43%) and the slowest rate of growth (8.2%) in the very next decade in the 1980’s.

Source: https://www.census.gov/hhes/www/housing/census/historic/values.html

Real Estate is an Inflation Hedge

Real estate is described as an exceptional hedge against inflation in that it typically rises at least as high as the annual reported national inflation rates somewhat like a floating buoy with the rising tide. Let’s take a closer look below at the median home value for existing single-family homes using both inflation-adjusted dollars and unadjusted dollars that were based upon the actual prices paid during the listed years for California and the United States in the 20th century and the very start of the 21st century (1940 – 2000):

Home Prices Adjusted for Inflation

United States’ Median Home Price (Adjusted to 2000 dollars*)

2000
$119,600
1990
$101,100
1980
$93,400
1970
$65,300
1960
$58,600
1950
$44,600
1940
$30,600

 California’s Median Home Price (Adjusted to 2000 dollars)

 2000
$249,800
 1990
$211,500
 1980
$167,300
 1970
$88,700
 1960
$74,400
 1950
$57,900
 1940
$36,700

* Source: U.S. Census Bureau
https://www.census.gov/hhes/www/housing/census/historic/values.html

 

Home Prices Not Adjusted for Inflation

United States’ Median Home Price (Actual unadjusted prices at the time)

 2000
$119,600
 1990
$79,100
 1980
$47,200
 1970
$17,000
 1960
$11,900
 1950
$7,354
 1940
$2,938

California’s Median Home Price (Actual prices)

 2000
$211,500
 1990
$195,500
 1980
$84,500
 1970
$23,100
 1960
$15,100
 1950
$9,564
 1940
$3,527

 

Median Sales Prices of New Homes Sold in the United States

Listed below are the median home prices across the nation between 1963 and 2018. Please note that these median home sales prices are related to brand new homes that are usually priced higher than older existing homes. When the median prices fall between one year and the next, they are highlighted in bold to show the years when there was price deflation. The very first year when the median home price for a new home fell was in January 1982 after several years of very high interest rates as partly noted by the U.S. Prime Rate reaching 21.5% in both December 1980 and January 1981.

Month-Year

January 1963

January 1964

January 1965

January 1966

January 1967

January 1968

January 1969

January 1970

January 1971

January 1972

January 1973

January 1974

January 1975

January 1976

January 1977

January 1978

January 1979

January 1980

January 1981        

January 1982       

January 1983

January 1984

January 1985

January 1986

January 1987

January 1988   

January 1989   

January 1990   

January 1991   

January 1992   

January 1993

January 1994

January 1995

January 1996

January 1997

January 1998

January 1999

January 2000

January 2001

January 2002   

January 2003   

January 2004

January 2005

January 2006

January 2007

January 2008

January 2009

January 2010

January 2011

January 2012

January 2013

January 2014

January 2015

January 2016

January 2017

January 2018

 

Median Home Price

$17,200

$17,800

$20,700

$21,200

$22,200

$23,400

$24,600

$23,600

$23,900

$24,700

$29,900

$34,200

$37,200

$41,600

$45,500

$52,300

$60,300

$62,900

$67,600

$66,200

$73,500

$76,200

$82,500

$86,600

$98,500

$119,000

$113,000

$125,000

$117,900

$120,000

$118,000

$126,000

$127,900

$131,900

$145,000

$148,000

$153,100

$163,500

$171,300

$187,100

$181,700

$209,500

$223,100

$244,900

254,400

$232,400

$208,600

$218,200

$240,100

$221,700

$251,500

$269,800

$292,000

$288,400

$315,200

$329,600

 

 Source: U.S. Census Bureau https://www.census.gov/construction/nrs/pdf/uspricemon.pdf

While the home price gains were quite impressive in California and the rest of the nation in most of the 20th century, they would later be far surpassed by the compounded price gains after we entered the 21st century. The higher the sales prices, the higher the sales commission fees collected by real estate agents and brokers. Many California real estate agents would later earn hundreds of thousands to millions of dollars each year in commission fees parallel with the record-setting price gains that were jump started with the tremendous price gains in the 20th century.